Market Update: We break down the business implications, market impact, and expert insights related to Market Update: Finance Ministry and Central Bank Unite to Tackle Growth Crisis – Full Analysis.
Ambitious Debt Relief and Investment Programmes
Central to the revival strategy is the “Debt-Free, Moving Forward” project, a collaborative initiative between the government and the Bank of Thailand.
The programme will transfer approximately 1.1 million non-performing loan accounts under 100,000 baht to Sukhumvit Asset Management (SAM), enabling citizens to restructure their obligations and regain access to credit.
“These are social problems for low-income and poor people,” Vitai emphasised. “We are giving them a chance to return to the economic system.”
The officials also highlighted the BOI Fast project, designed to unlock 480 billion baht in pending investments by streamlining approvals for 78 key projects.
Dr Ekniti suggested this initiative alone could significantly boost next year’s growth beyond the current 1.5% projection.
Structural Reforms Target Long-Term Competitiveness
Addressing Thailand’s demographic challenges, Dr Ekniti announced plans to utilise Section 17 of the Labour Act to grant special privileges to highly skilled foreign workers, helping offset the country’s shrinking workforce.
“The Thai population will get smaller and smaller. We must bring in talented people,” he stated. “Why can we facilitate labour from Myanmar or Laos, but not someone earning 1 million?”
Additional initiatives include pushing for Direct Power Purchase Agreements to provide clean energy – now a requirement for global companies considering investment in Thailand – and implementing a “Skill Bridge” reskilling programme to align workers with modern industrial needs.
The Deputy PM acknowledged that Thailand’s reliance on outdated industrial models and fossil-fuel technology, combined with tens of thousands of redundant regulations creating “frequent traffic jams”, had contributed to the economy’s malaise.
Central Bank Expands Mandate Beyond Traditional Stability Role
Perhaps most significantly, Vitai announced that the Bank of Thailand is expanding its role beyond maintaining macroeconomic stability to actively leading structural reform efforts.
“Structural problems cannot be solved with the policy interest rate,” he explained. “It can stimulate consumption or investment slightly, but structural problems require measures. We are expanding our role to be a leader in solving structural problems.”
The governor defined the bank’s new approach using four values: “Standing straight, looking far, reaching out, and working together.”
He also addressed criticism of the central bank’s monetary policy stance, noting that Thai interest rates are the third lowest globally, behind only Switzerland and Japan.
“Lowering rates gradually allows people to pay off the principal more effectively,” he argued.
The panel concluded with officials emphasising their “Connect the Dots” strategy, which includes establishing a data bureau to link information between the Bank of Thailand, the Securities and Exchange Commission, and the Ministry of Finance to better track illegal capital flows.
Whether these ambitious reforms can successfully “lift the car out of the pit”, as Dr Ekniti hopes, remains to be seen. What is clear is that Thailand’s economic leadership has moved beyond mere analysis to active, coordinated intervention in pursuit of revival.